Posted on 01/17/2008 11:35:09 PM PST by TigerLikesRooster
is that all you got to say...
of wait -— it’s up ?
Maybe NOW would be a good moment - hu ?
I already spelled out your market ignorance upthread.
lol um yeah but my market ignorance keeps me afloat quite well :)
As they say in a large country inhabited by big mouthed guys with bizar hats:
If it’s a stupid idea - but it works - it ain’t stupid.
Buying futures for delivery is different than your original claim that the option traders were making all the money.
yes it is - you are welcome !
But it’s not a contradiction - is it ?
It has nothing to do with your claim that futures trading is not zero sum.
What kind of trade IS zero sum ?
It’s against the whole idea of trade.
Trades on a futures exchange. A seller writes a contract and the buyer buys it from him.
The profit made by one side is matched by the loss on the other side. They both pay commissions and fees, so it's actually a negative sum trade.
but if you enlarge the hull it’s not.
and I wasn’t even the one who started on future trading ... I was talking about derivatives - options don’t have to be symmetric.
Option trades are just like futures. Whatever the seller/writer makes/loses is matched by what the buyer loses/makes.
So my point is that the trade of derivatives increases the prices of the underlying values.
Wich is yours ?
but the initial seller (the issuer) will sell with a fee called spread.33
but the initial seller (the issuer) will sell with a fee called spread.
My point is you don’t understand derivatives.
A spread is not a fee.
If the market for an option is 3/4 - 1 1/4, the buyer will pay 1 1/4. Now that he has established his position, whatever he makes will be offset by the seller's loss. Whatever the buyer loses will be offset by the seller's gain.
Think of it as a poker game with only 2 players. One loses, the other gains. And the house takes a little bit off the table anytime the players trade.
And don’t forget the steep rise in corn prices that all of this biofuel craziness is causing.
You guess ?
Well I guess that if you are right that I am in good company - maybe there’s much less to understand as most people dealing with them always thought.
In fact I don’t think that people dealing with derivatives think much about what they are really doing.
So - say you don’t want to make a real comment with a meaning do you ?
Think of it as a poker game with only 2 players. One loses, the other gains. And the house takes a little bit off the table anytime the players trade.
yeah - ok - You know that and I know that. It’s a zero sum game until it comes to fees and spreads. The house earns money - that’s why it’s not a zero sum game.
What’s the point of using your brain and creativity for making up misunderstandings ?
You shouldn’t be embarassed when the gold lovers are right at the moment - if plan A fails - you know - plan b is next.
No. It's clear that you don't understand derivatives.
Then what did this comment mean?
It’s not the 2 dollar back and forth - it’s the interests on captial - the spreads - and all that.
And why are you so confused about spreads?
thank you - you are a great help.
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